In the Eye of the Storm, Get a Jump on Frugal Living and Start Saving Today

By: Steve Johnson

8/13/2009 -62 Comments

Spotting a future trend before it happens is one of the best ways to make a lot of money.

As the markets appear to be stabilizing and the leaders give the ‘all clear’ signal as they encourage everyone to jump back into their spending ways, an eerie sense is still in the air. If your senses are still working you will be able to sense the feeling, which is similar to being in an eye of a storm.

Eye of the Storm

Sometimes the only way to tell if a storm has passed or if you are in the eye of the storm is to look at the weather radar. In this case, the economic indicators are pointing in several different directions making it very difficult to determine if the storm has passed.

The way I see it is that the storm didn’t pass and we have just moved into the center of it. If fact, from the looks of things the storm is gaining a lot of momentum as it sits over us. The only economic indicator giving the ‘all clear’ is the stock market rally, but remember that is the same indicator that hit an all time high just two months before this recession stated - hardly an indicator of predicting the future.

Feeding the Storm

As we begin moving out of the eye of the storm in the next few months, I expect things to get a lot worse.

Everyone seems to think that the government has saved us from the worse of the storm, but there is really nothing the government can do to save us. The government actions will not stop the recession without returning to fundamental economics and sound money, which they will eventually be force to do.

That said, their idea of saving us from the economic storm has been to increase the money supply, which is equivalent to feeding the storm and hoping it goes offshore. Since most the dollars in circulation are used outside the US, increasing the money supply will create massive inflation abroad.

The only problem is the world does not like out strategy because they don’t want the storm moving into their land. China, India, Japan and even Europe are not happy with the policies of the US government to try to push the storm offshore. They want us to deal with it since we created it. The only way to counter the storm from moving offshore and into the rest of the world is if the entire emerging world acts together to stop the US from inflating the dollar.

They can do that by selling their dollars. The weakening dollar will cause the inflation to stay in the US and force the building economic storm from moving offshore. Of course that situation would be devastating for the US economy, which would be faced with rising prices of consumer goods and increasing interest rates - on top of the damand already caused by the first wave of the storm.

Frugal Living

The best way to manage the other side of the economic storm that the world is not going to let the US push offshore is for us to learn to live with less. The storm is going to force the US public into a much lower standard of living then we have enjoyed for the last several decades.

Ask yourself, what would be in high demand if prices were to increase by double digits for several years? What would be in high demand if interest rates were to drastically increase? I can think of a few like food, clothing, alternative medicines, basic utilities, low cost entertainment, etc. These are the areas that will be growing in demand very quickly when we come out of the eye of the storm and realize that the government wasn’t able to push the storm offshore.

Savings rates will also drastically increase, for many reasons – and not just a few percent like they have, I’m talking 30-40%. Now is the time to find creative ways to lower your fixed expenses in order to boost your rate of savings. If you plan on keeping some of your assets (houses, cars, etc.) you may need several years’ worth of saved income.

In discussions of today's economic meltdown and what to do about it, the Federal Reserve is a stealth helicopter: it never shows up on the radar. With the exception of a few esoteric specialists and those Ron Paul Revolutionaries who burst into chants of "Abolish the Fed!" Historian Thomas Woods notes in this important book, the Federal Reserve bears a large part of the blame for the mess we're in. In the first part of "Meltdown," Woods shows how both in theory and in practice, Fed policy fueled an artificial boom and is now leading us to a much larger meltdown.

There's a big difference between "making a living" and making a life. Do you spend more than you earn? Does making a living feel more like making a dying? Do you dislike your job but can't afford to leave it? Is money fragmenting your time, your relationships with family and friends? If so, Your Money or Your Life is for you.
From this inspiring book, learn how to, get out of debt and develop savings, reorder material priorities and live well for less, resolve inner conflicts between values and lifestyles, convert problems into opportunities to learn new skill, attain a wholeness of livelihood and lifestyle, and much more.

This book is a study of the America millionaires. The results tell that most millionaires are hard working people, as eighty percent of America's millionaires are first-generation rich. They became millionaires by budgeting and controlling expenses, and they maintain their affluent status the same way. The conclusion is that anyone can do it, with planning and determination.

Mr. Karp provides quick, easy to read, practical tips for smart spending choices. This isn't a book about saving for investing; it’s about making purchase decisions wisely and with purpose. What's more important than taking control of spending habits? Practical advice, easy to adopt changes for sound money management. Easy read with great tips, this book pays for itself in ONE day!